TBS, meanwhile, is betting it can turn a profit in the increasingly competitive late-night sphere with a deal described as "expensive" by people familiar with the matter.

"We see late night as the next land of opportunity," said Steve Koonin, president of Time Warner Inc.'s Turner Entertainment Networks, which includes TBS and sister network TNT. "We think [Mr. O'Brien] is a building block to build this network around.''

Mr. O'Brien's as-yet-untitled show will debut in November, and run four nights a week at 11 p.m. Eastern time.

Mr. O'Brien could be paid close to what he earned at NBC, some people familiar with the matter said, although it is unclear whether those estimates include bonuses, equity or other terms that make a comparison difficult. A person briefed on Mr. O'Brien's NBC salary said he was paid about $12 million a year.

Mr. O'Brien's five-year pact with TBS gives his production company ownership of his show, with TBS retaining a stake, according to people briefed on the deal.

Mr. O'Brien left NBC in January, after he was booted from his 11:35 p.m. time slot to make room for Jay Leno, the longtime "Tonight Show" host who was returning from a failed experiment in prime time. NBC, which is owned by General Electric Co., paid Mr. O'Brien and his staff about $45 million to settle their contracts.

Mr. O'Brien's move to cable from broadcast is a surprise turn. Fox and representatives of Mr. O'Brien had talked for months about the comedian hosting a late-night show for the News Corp.-owned network.

Some executives and many local stations that air Fox programming were unconvinced a show with Mr. O'Brien would be a financial success after his run on the "Tonight Show," which had weak ratings. Other people said Fox and Mr. O'Brien's representatives were still talking last week.

"Conan is a great talent and we wish him every success," Fox said Monday. News Corp. also owns The Wall Street Journal.

So far in 2010, TBS is the seventh-most-watched cable network in prime time, where it averages 1.7 million viewers, according to Nielsen Co.

That's a fraction of the 12.1 million who on average watched prime-time shows this season on CBS, the most-watched broadcast network.

TBS, available in 100 million homes, has averaged 933,000 viewers each minute this year, down 7.8% from the same period a year ago, Nielsen said. One person familiar with the matter said the network's slate of sitcom reruns was showing some age: "We needed a little oomph," the person said.

ENLARGE

Conan O'Brien had been in negotiations with News Corp.'s Fox network. before reaching a deal with TBS, a cable channel owned by Time Warner.
Getty Images

The defection of a big-name broadcast TV talent to cable TV comes amid a creep of programming and advertising dollars to pay TV. Cable networks have invested billions of dollars in original scripted shows, high-profile sports events, kids' programming and late-night shows.

A handful of big networks increasingly resemble their broadcast competitors in their offerings. Mr. Koonin two years ago even moved his glitzy announcement of new TV shows to the May week traditionally reserved for NBC, Fox, CBS and ABC.

"What we've been able to do is build brands and erode broadcast's stranglehold on advertising," Mr. Koonin said.

Serious talks to bring Mr. O'Brien to TBS began two weeks ago, Mr. Koonin said. Part of the plan is for George Lopez, who started a late-night show on TBS last fall, to move back to midnight to accommodate Mr. O'Brien. Mr. Lopez was supportive of the idea and phoned Mr. O'Brien to lobby him to move to TBS, according to people close to the network and Mr. O'Brien.

ENLARGE

George Lopez, at right, shown in February, is expected to move to midnight to accommodate Conan O'Brien.
TBS

"I can't think of anything better than doing my show with Conan as my lead-in," Mr. Lopez said in a statement provided by TBS.

Negotiations between TBS and Mr. O'Brien began moving quickly last week and were completed in a marathon by Friday, Mr. Koonin said.

TBS's pitch to Mr. O'Brien focused on its younger average audience than the broadcast networks, where Mr. O'Brien had seen his average viewership dwindle before his dispute with NBC gave it a boost. TBS also argued that comedy shows like "Family Guy," which TBS airs in reruns on Mondays and Thursdays, would deliver a compatible audience for Mr. O'Brien's new show.

In the wake of his departure from NBC, Mr. O'Brien this week begins a tour of live comedy performances, titled the "Legally Prohibited from Being Funny on Television Tour."

"In three months I've gone from network television to Twitter to performing live in theaters, and now I'm headed to basic cable," Mr. O'Brien said in a TBS statement announcing the late-night show. "My plan is working perfectly."

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.